The Detroit Tigers and other MLB teams are canceling their TV contracts with FanDuel Sports Network due to financial instability within the network, which is struggling to stay afloat amid industry-wide challenges and potential bankruptcy. Teams are exploring alternative broadcasting options, including moving to MLB's own media platform, as the regional sports network industry faces declining revenues and viewership shifts to streaming.
Major League Baseball (MLB) will take over the Cincinnati Reds' local broadcasts starting in 2025, offering both traditional TV and a new direct-to-consumer streaming option without blackouts. This move comes as the regional sports network model struggles due to cord-cutting, with MLB already handling broadcasts for several other teams. The Reds' previous broadcaster, Diamond Sports Group, is reducing its portfolio after bankruptcy, leading to MLB's expanded role. While the streaming model offers fans more flexibility, it may initially reduce revenue for teams like the Reds, who previously benefited from lucrative cable deals.
Diamond Sports Group has reached a multiyear agreement with Prime Video to offer its 16 regional sports network channels as an add-on subscription, expanding its reach to fans in 31 states. This partnership is part of Diamond's efforts to reorganize amid Chapter 11 bankruptcy proceedings, with a final hearing on its reorganization plan scheduled soon. The company will also offer single-game pricing for NBA and NHL games starting December 5, alongside monthly and season pass options.
The MLB offseason is poised for potential activity following productive general manager meetings, with starting pitching expected to be the most dynamic market segment. The collapse of regional sports networks, particularly affecting small-market teams, complicates financial landscapes, but some teams are prepared to spend on top free agents like Juan Soto and Corbin Burnes. The disparity in local TV revenue could influence market dynamics, with stable RSN situations benefiting larger teams.
Major League Baseball and the Atlanta Braves have expressed concerns over Diamond Sports Group's reorganization plan, fearing the company may face financial distress again soon. The objections, filed in bankruptcy court, highlight a lack of clarity in Diamond's restructuring proposal and its commercial partnership with Amazon. Diamond, the largest owner of regional sports networks, is seeking court approval for its plan, while MLB and the Braves seek more information. Diamond is also renegotiating contracts with several MLB teams, with some teams opting to have MLB produce their local games.
Major League Baseball and the Atlanta Braves have filed an objection to Diamond Sports Group's reorganization plan, expressing concerns about the company's financial projections and lack of transparency. Diamond, which is in Chapter 11 bankruptcy, is set for a confirmation hearing next week. The Cincinnati Reds have already parted ways with Diamond, and several other MLB teams are exploring alternatives. Diamond, which recently rebranded to FanDuel Sports, is also negotiating a commercial deal with Amazon to expand its direct-to-consumer offerings.
Knicks owner James Dolan criticized the NBA's new $74.6 billion media deal in a letter to the league's Board of Governors, arguing it undermines Regional Sports Networks and penalizes high-revenue franchises like the Knicks. Dolan contends the deal, which includes streaming platforms and national broadcasters, reduces the viability of RSNs and lacks transparency in revenue retention. He believes the new model de-emphasizes local markets and unfairly redistributes revenue from successful teams to less successful ones.
New York Knicks owner James Dolan criticized the NBA's revenue sharing policies and the new $74.6 billion media deal, arguing it undermines local markets and Regional Sports Networks (RSNs). Dolan's letter to the NBA's Board of Governors expressed concerns over the league's retention of 8% of the media deal revenue, the impact on local sponsorships, and the viability of RSNs due to increased national and streaming broadcasts. He warned that these changes could harm successful franchises and reduce the value of local media rights.
Amazon is looking to invest in Diamond Sports Group, the operator of Bally-branded regional sports networks, to keep it afloat after bankruptcy. The plan involves Amazon contributing $115 million, with creditors adding $450 million, to form a new company to manage Diamond's assets. If approved, the deal could impact how baseball games are broadcast and streamed, potentially affecting in-market and out-of-market viewing options. However, there are concerns about the long-term financial viability of the plan and skepticism about Diamond's revenue projections. Despite these uncertainties, experts believe the plan has a good chance of being approved, with MLB teams likely to remain with Diamond for the 2024 season.
Amazon has committed to making a minority investment in Diamond Sports Group as part of the RSN company's bankruptcy reorganization plan, which includes a new streaming deal. Under the terms of the investment, Amazon will provide access to Diamond's services via Prime Video, allowing customers to purchase direct-to-consumer access to stream local Diamond channels, including live MLB, NBA, and NHL games. Diamond also announced an agreement in principle with parent company Sinclair to settle pending litigation, with Sinclair agreeing to pay Diamond $495 million in cash and provide ongoing management and transition services.
Amazon is reportedly in talks with Diamond Sports Group to acquire streaming rights for regional sports networks (RSNs) such as Bally Sports Wisconsin, potentially allowing them to stream games from teams like the Brewers and Bucks. This partnership could also help Diamond Sports Group avoid liquidation and continue broadcasting on cable and satellite platforms. While the details and investment amount are unclear, any agreement would require approval from a bankruptcy judge and could result in games being streamed on Amazon instead of the Bally Sports Wisconsin app.
The business model challenges faced by regional sports networks (RSNs) due to cord-cutting are causing a ripple effect across the TV ecosystem. While some bigger-market RSNs are staying afloat, many others are struggling, with Warner Bros. Discovery planning to exit the space. Diamond Sports, formerly Fox Sports RSNs, filed for bankruptcy protection, leading to the loss of control over San Diego Padres games. The future of live local sports could involve direct-to-consumer streaming services and national distribution through platforms like Amazon, YouTube, or Apple. The RSN struggles are already impacting the TV business, with companies making strategic moves for a post-RSN world. The landscape is shifting, and the local sports media industry is expected to undergo a major transformation.
The Phoenix Suns and Phoenix Mercury have signed a deal with Gray Television to air their regular seasons on local broadcast networks throughout Arizona, marking a pivotal moment that will see a professional sports team exit the regional sports business and bring regular season games back to fans through their local TV stations. The teams also signed a deal with Kiswe to start their own direct-to-consumer streaming service. The move comes as regional sports networks have been under pressure as customers cut their pay-TV subscriptions and opt for streaming.
The MLB has filed an emergency motion demanding payment for the Minnesota Twins and Cleveland Guardians from Diamond Sports Group, which filed for Chapter 11 bankruptcy last month. The Arizona Diamondbacks were not listed in the demands as they had exercised a contractual grace period. Diamond Sports Group is the largest owner of regional sports networks and has the rights to televise 42 professional teams, including the Suns and D-backs. The company said it had a debt of $8.67 billion.
The YES Network, co-owned by the New York Yankees, is launching a direct-to-consumer streaming service for non-cable subscribers to watch Yankees games, as well as games for the NBA's Brooklyn Nets and the WNBA's New York Liberty. The service costs $24.99 per month or $239.99 annually, with a promotional offer of $19.99 per month or $199.99 annually for subscribers who sign up before April 30. The move follows other regional sports networks, such as Diamond Sports Group and MSG Networks, offering streaming services outside of the cable bundle to reach consumers who don't subscribe to traditional pay-TV.
